Maybe it’s obvious, but in the for-profit world, making money is the point; profit defines success. In the non-profit world, the relationship between profit and success is more complicated. “Profit” (or balancing the books) is regarded as a hill to be climbed over rather than the objective.
In the hyper-connected world of social media, profit is no longer simply about selling more product. More than ever consumers are about relationships – the kinds of relationships that non-profits have worked on for years. It used to be that a company’s story was essential to those consumer relationships; now it’s the stories of the community around the company that are increasingly important. Companies like Marriott have become sophisticated storytellers and content producers because of their need to attract audiences who increasingly define themselves by the stories they share. Through those stories, audiences become invested in the success of the community around the companies. Sound familiar?
Crowdfunding: Raising Money Or Building Audience?
Crowdfunding began as a way to raise money to fund products; it’s evolved into a way to create social networks around ideas that can be shared and invested in, populated by customers who have a stake in the success of that community.
Maybe this is just the next evolution in clever marketing, but I wonder if it’s more than that. Investors are more loyal than traditional customers, and communities of investors are more focused on the success of their community than unconnected consumers are. Marketing’s sweet spot has always been the emotional tug – buy our product and you will feel glamorous. Desireable. Smart. Funny. Hip. In a hyper-connected world, companies now want you to feel about them the way you do about your favorite sports team. Root for them. Root for each other. Do what you can do to help. Buy more stuff.
The arts have long depended on patrons to feel like they’re part of a community. But how many arts organizations make their communities feel like investors? Plenty of artists have used crowdfunding to raise money for projects. But those who are really good at it use it not just to raise money but to motivate an audience.
A recent study found that musicians earn money from 45 revenue streams, many of them not directly involved with the act of playing music itself. Diversifying income sources is essential these days as the music business whipsaws between business models.
One could think of those revenue streams simply as the way you make money. You could think of them as desperate strategies to continue to make income as compensation for playing and recording music has collapsed. Or you can think of them as opportunities for audiences to become investors. Investing with money, sure, but also audience investing in your success. Wearing your T-shirt, talking you up, sharing your music, your pictures, motivating others to pay attention.
These days people define themselves through what they choose to share. If they’re particularly motivated they’ll be creative in how they share their love. That in turn motivates others and the cycle repeats. Why would anyone spend hours making a video or writing a blog post promoting someone who isn’t paying them? Because they’ve gone from being consumers to being investors. Investing in you is investing in their own identity.
The idea is simple, really. Investors are worth much more than customers. Customers consume, then move on; investors take a personal stake in your being successful (we call them fans). People who make no investment in consuming your work are only fickle customers. People who are invested in you are worth much more than any money they might throw your way. I’m not sure there’s anything new in this – there have always been fans and artists have always been dependant on those fans to promote them. But today fans can have as much if not more impact in building an audience around you as traditional media. This guy can get 7 million subscribers to his YouTube channel, 100s of millions of views of his videos and enough fans that he writes a book and makes a movie? Seriously. You can be appalled, or you can try to figure out how he did it.